If you’re thinking of applying for a mortgage, there are some things you should avoid doing in the months leading up to your application.
Here are five tips not to do before applying for a mortgage:
1. Don’t change jobs – Lenders like to see stability in employment, so avoid changing jobs in the months leading up to your mortgage application. If you must change jobs, be sure to notify your lender and provide them with updated employment information.
2. Don’t make any major purchases – Big purchases, such as a new car or piece of furniture, can impact your debt-to-income ratio and make it more difficult to qualify for a mortgage. Avoid making any major purchases until after you’ve closed on your home loan.
3. Don’t move around your money. Banks like to see where your downpayment is coming from and require 3 months worth of bank statements. Keep your downpayment safe in 1 account (or RRSP).
4. Don’t open any new lines of credit – Opening a new credit card or taking out a personal loan can negatively impact your credit score and make it harder to get approved for a mortgage. If you need to finance a large purchase, consider using savings instead of borrowing money.
5. Don’t forget to check your credit report – Before applying for a mortgage, obtain a copy of your credit report and check it for errors. If you find any incorrect information, be sure to dispute the errors with the credit bureau. By taking these steps, you can help improve your chances of getting approved for a home loan.
If you’re thinking of applying for a mortgage, avoid doing these five things in the months leading up to your application. By following these tips, you can help improve your chances of getting approved for a home loan.
For more tips on what not to do before applying for a mortgage check out this article.